Why Airbnb just wrote a letter to New York legislators begging to pay more taxes

Today, on Tax Day here in the USA, room rental startup Airbnb sent a letter to the New York
State legislature indicating that the company really wants to pay
its fair share of taxes — tens of millions, to be exact.

It's possibly the most excited anyone's ever been to pay taxes,
which might raise some suspicions.

Airbnb asks simply that it be
allowed to collect the required hotel taxes on behalf of its
hosts and guests and submit them directly to the state. Airbnb
claims that "tens of millions" in revenue for the state is at
stake.

The company is already doing this in places like San
Francisco, Portland, San Jose, Chicago, Washington, D.C., and
Amsterdam.

"While other companies frequently attempt to avoid paying
taxes, Airbnb has been working with governments around the world
to help collect more tax revenue," says the letter, which is
signed by Airbnb Head of Global Public Policy David
Hantman.

So what's going on here? Nobody
is that excited to pay taxes.

The issue here is usability for Airbnb hosts. In New York,
hosts are responsible for collecting hotel taxes on Airbnb
stays.

What Airbnb can do is make the whole process a lot easier
on hosts by accepting the burden. If its fees and commission have
to go up a little bit to cover taxes, so be it — Airbnb seems
perfectly willing to jump on that grenade. (Consider
the letter that Airbnb sent around to hosts in San Francisco,
claiming that the city
was trying to collect taxes from hosts
directly even after Airbnb itself paid those very
same taxes.)

But the more paperwork that hosts have to fill out and the
more local governments give them a hard time, the less likely
they'll continue to list on Airbnb.

Short-term apartment rentals via places like Craigslist are
harder to do, but less drama is less drama. And that's the last
thing a growing startup like Airbnb wants hosts to think.

Airbnb is also trying to boost its legitimacy in New York,
where short-term rentals of entire homes (as opposed to single
rooms) is illegal for less than 30 days.

Here's the full text of Airbnb's letter:

Dear Members of the New York State
Senate and Assembly,

As New York families finish their
taxes, we write to once again renew our request to work with you
to ensure the Airbnb community can contribute even more tax
revenue to the State.

While other companies frequently
attempt to avoid paying taxes, Airbnb has been working with
governments around the world to help collect more tax revenue. We
provide 1099 forms to help our hosts pay income taxes on the
money they earn while sharing their space. We have also begun
collecting and remitting hotel and tourist taxes in San
Francisco, Portland, San Jose, Chicago, Washington, D.C., and
Amsterdam and will expand this initiative to include other
jurisdictions in the coming weeks and months.

We would like to implement a
similar program in New York, but current State and New York
City tax rules do not allow Airbnb to help collect and remit
hotel and tourist taxes on behalf of our hosts and guests.

We were hopeful that New York State
would address this matter in this year’s budget. Unfortunately,
one of the casualties of this year’s budget negotiations was a
provision governing taxes in online marketplace transactions that
could have generated millions of dollars of vital revenue for New
Yorkers.

The tax on electronic commerce
would have required certain websites (or marketplace providers)
to collect New York sales tax on sales made by remote sellers. It
would have also enabled Airbnb to help collect and remit tens of
millions of dollars in hotel and tourist taxes to the State of
New York on behalf of our hosts and guests, the benefits of which
would have been felt in every corner of our state.

We continue to urge State and City
leaders to let our community contribute more tax revenue to New
York. We urge members of the New York State Senate and Assembly
to pass at least the portion of this legislation that would allow
Airbnb to collect and remit taxes as quickly as possible.